With the Iran peace deal, it is now worth fixing our energy plan

Belgiancat

I am due to renew my energy plan. Do I fix or go standard.?

With the new Iran peace deal, I am wondering if it is worth fixing my energy deal since energy prices may come down.

What is the thought?

QrizB

I've just posted on the "news" thread that I'm not expecting prices to fall significantly until the spring.

Of course I've got no special knowledge and I might be wrong!

Woodstok2000

https://forums.moneysavingexpert.com/discussion/6672585/with-the-iran-peace-deal-it-is-now-worth-fixing-our-energy-plan

No one can predict the future, but especially with the players involved in this peace deal it may last a day, a week, a year - impossible to tell. DJT may decide to invade Saudi and the price will skyrocket, or he may do nothing and it will reduce. The decision really depends on how much you value certainty over any potential gain/loss from market movements.

Scot_39

Whilst its hopefull - more so than for months - Nothing has yet been signed.

And assuming this plan - more an outline plan to have a plan - to resolve some still potentially very contentious issues- is signed on Friday - months or worse even years will be required (as last time for nuclear) to sort out thorny issues.

For me if could, I'd go ahead with a good if not the cheapest fix - as they are likely to have high exit fees - if think that prices going to really drop.

But one you can swap out of if peace holds and a better deal comes along. Either zero fee if can get (most seemed to disappear due to crisis weeks ago) or at a supplier who allows free internal tariff changes (2-3 of big 6 did this in past, not sure if they still do during this crisis).

Swipe

The chances of a long lasting deal IMO are slim to none

FreeBear

https://forums.moneysavingexpert.com/discussion/comment/82035458#Comment_82035458

It will take months (years ?) for oil/gas to start flowing properly - Shipping companies will be reticent to send their vessels through the Strait of Hormuz until they are certain things have settled down. It will take time for refineries to ramp up production (some may have been shut down completely).
Spot prices of oil/gas may well drop, but that will take time to filter down to us mortals. The OFGEM price cap is based on what the energy suppliers have been paying over the last 3-6 months not next weeks prices. There may be slight falls in fixed offerings over the next 6 months, but I'm with QrizB - No significant falls until next year.

Anton30

I think oil prices will come crashing down. Isn’t it funny how energy suppliers are quick to increase prices when oil price goes up but are not quick to follow when they come down.

As for oil prices, they are likely to come down into $50-60 range, effectively half what it was during the conflict.

That said, oil shipments may not recover for quite a while.

Swipe

WTI already down to below $80

Scot_39

Oil doesn't seem to be dropping as much as UK gas, that I posted a link for earlier.

But oil - WTI and Brent - seems more in line with others like German gas pricing - according to the site below - so around the 4 - 5 % mark.

The good news - is UK gas has fallen a little more this afternoon - to around the 100p/therm level. Over 10% down on the day.

Around 5p/therm less than when I posted the price trend link earlier - when it had only dropped to c105p

Which hopefully - if lasts or hopefully if "peace" continues - ramps downward - might make this winter's bills less unbearable.

But it is worth also noting the relatively stability of UK gas pricing this time around - perhaps related to seasonal timing of the war - and perhaps the higher risk of not having this sorted now before get into summer / autumn - when we and EU will need to start filling reserves (which some reports say they had been holding off on - the peak target was certainly reduced EU wide by 10% iirc for this winter earlier - storage which had a good impact on pricing stability over last winter).

The spiking during Iran - showed a peak of around 152p/therm on UK gas - pales next to the Ukraine crisis - when peaked at over 4x that at around 640p/therm in August 22 - when Gazprom announced shutting down jusat 1 delivery route - it's Nord Stream pipeline.

And even though lower either side - the market Ofgem smoothing led to a cap rate which spiked at around the 17p/kWh retail level in Q1/23 - but thanks to EPG - capped at 10.3p/kWh on bills for 9 months of crisis peak.

And despite the rise in July to 7.3p on the cap- we are - at least so far - still along way to go from Ukraine era pricing - cap real market 17p or EPG protected.

Change the graph base to 5 years here - and you will see what I mean

https://tradingeconomics.com/commodity/uk-natural-gas